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Narm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners Narm and Cozy. Current revenue,
Narm Hands, a small company based in Prince Edward Island, manufactures and sells two types of lightweight gloves for runners Narm and Cozy. Current revenue, cost, and unit sales data for the two products appear below: Fixed expenses are $1,890 per month. Pequired: 1. Assuming the sales mix above, do the following: . Prepare a contribution format income statement showing both dollars and percentage columns for each product and for the company as a whole. (Round percentage answers to 2 decimal places.) 2. The company has developed another type of gloves that provide better protection in extreme cold, Toasty, which the company plans to sell for $20.00 per pair. At this price, the company expects to sell 500 pairs per month of the product. The variable expense would be $16.00 per pair. The company's fixed expenses would not change. a. Prepare another contribution format income statement, including sales of Toasty (sales of the other two products would not change). (Round percentage answers to 2 decimal places.) b. Compute the company's new break-even point in sales dollars for the company as a whole and the new margin of safety in both dollars and percentage of sales. (Round your break-even sales to the nearest whole dollar amount and percentage answer to 2 decimal places.)
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